WIREDGOV

The European Commission has launched two public consultations related to access for alternative operators to the fixed telephone and broadband networks of established operators. The consultations are part of Commission efforts to boost the Single Market for telecoms services by ensuring consistent and coherent approaches to regulating telephone and broadband networks in all Member States.

The first consultation concerns non-discriminatory access for alternative operators to the infrastructure and services of dominant telecom operators. The second concerns the way national regulators calculate prices that operators have to pay for this wholesale access (cost-orientation remedies). The results will help the Commission to draft Recommendations for a consistent, investment-friendly application of non-discrimination and price control remedies.

Neelie Kroes, European Commission Vice President for the Digital Agenda said "We need regulatory consistency in all Member States to ensure a level playing field for telecoms across the whole EU, in which competition and investment can thrive. This will reassure markets that putting money into fibre networks is a safe and profitable investment."

Regulatory consistency is crucial to ensuring that telecoms operators have predictability and regulatory clarity, particularly when considering the large scale investments needed to roll-out ultra-fast optical fibre-based networks (see MEMO/10/424). These "next generation" networks are essential to meet the Digital Agenda for Europe goal of giving every European access to fast and ultra-fast broadband by 2020 (see IP/10/581, MEMO/10/199 and MEMO/10/200). Consistency also helps telecoms operators to be active in several Member States. The consultation on wholesale pricing examines in particular how the relationship between copper and fibre access prices can affect the incentives to invest in new fibre-based networks.

The Commission is looking into these topics because national telecoms regulators are currently taking different approaches when they choose to regulate in these fields.

When applied by national telecoms regulators, the Commission's guidance will ensure that operators will be able to buy broadband access products, such as unbundled local loops or "Bitstream", in a similar way across the EU. This will enable operators, ultimately, to offer their own competitive retail services to consumers on equivalent conditions.

Both consultations are open to telecoms operators, consumer organisations, national regulators, Member States and other interested parties until 28 November 2011.

Background

Under EU telecoms rules, national regulators can require dominant operators not to discriminate against their competitors in favour of their own retail businesses, so as to prevent them from abusing their dominant position in the market. For the past eight years, the Commission has been assessing proposals by national regulators concerning dominant operators under the consultation procedure established by Article 7 of the EU's Electronic Communications Framework Directive (2002/21/EC) (see MEMO/10/226). The Commission has found that national regulators' understanding differs as to the exact scope and application of the "non-discrimination obligation" and that their monitoring and enforcement also vary.

National telecoms regulators also apply significantly divergent approaches when setting cost-oriented prices, which alternative operators must pay for accessing telecoms infrastructure. Even where national telecoms regulators apply the same way of calculating prices for the same access products, there are substantial variations in terms of implementation. This leads to a considerable divergence of prices across Europe (e.g. from 5.21€/month in Lithuania to 12.41 €/month in Ireland for wholesale access to the local loop). The Commission does not believe that these major differences between countries can be explained solely by variations in underlying costs.

The resulting regulatory fragmentation not only jeopardises much needed investments in new technologies but also hampers the evolution of the Single European telecoms market and the development of pan-European operators. This is why the Commission announced in the Digital Agenda for Europe that it would prioritise the provision of guidance on these topics for national regulators.

Next steps

Revised EU telecom rules in force since 25 May 2011 give the Commission new powers to ensure that these rules are consistently applied (see MEMO/11/321). In particular, if the Commission finds that there are divergences in the way national regulators implement the telecom rules, which may create a barrier to the Single Market, the Commission may, taking utmost account of the opinion of BEREC (the Body of European Regulators for Electronic Communications), first issue a Recommendation. Under EU telecoms rules, national regulators have to take the "utmost account" of Commission Recommendations. After at least two years following adoption of a Recommendation, the Commission can adopt a binding Decision on the harmonised application of the provisions of the framework, including the remedies imposed on dominant operators (i.e. those enjoying significant market power).

If, on the basis of the results of the consultations, the Commission decided to issue guidance in form of a Recommendation on either or both subjects, it would first seek opinions from BEREC, under Article 19 of the Electronic Communications Framework Directive (2002/21/EC), and from the Communications Committee (COCOM), an advisory committee composed of Member State representatives.

The consultation document is available at:

http://ec.europa.eu/information_society/policy/ecomm/index_en.htm

Digital Agenda website: http://ec.europa.eu/digital-agenda

Neelie Kroes' website: http://ec.europa.eu/commission_2010-2014/kroes/

Follow Neelie Kroes on Twitter: http://twitter.com/neeliekroeseu